Tony Norfield’s challenging and important book exposes the City of London as the source of ruthless capitalist exploitation globally , says ANDREW MURRAY

The City by Tony Norfield(Verso Books, £20)

HOW many Marxists are at work in the dealing rooms of the City? Presumably they keep their heads well down.

Tony Norfield is — or was — one. Twenty years a trader at the centre of the financial web, he has married the insights into the workings of the system he gained to a thorough Marxist understanding of political economy. The result is this fascinating book.

Its greatest merit is that it locates the City, the greatest centre of world capitalist finance, in an analysis of imperialism and, specifically, British imperialism.

Norfield slays some of the sacred cows of much of the left along the way. He challenges the idea that “finance” is bad while “production” is good and that a healthier capitalism could be created if the latter were only shorn of the former.

That error has acquired particular potency in the wake of the 2008 banking crash but it is nevertheless wrong. Both are integral parts of a capitalist system of profit-making.

While it is true that much of what the financial services sector in Britain does is parasitic, in the sense of purely appropriating value without creating it, this emerges organically from capitalist production relations. It is inextricable from it, rather than being an excrescence which could be discarded by a more enlightened public policy.

Britain’s super-sized finance sector reflects the long-cultivated role of the City in international capitalist networks and is reinforced by Britain’s imperialist role, even as it expresses that role. Likewise, Norfield rejects the view that British imperialism is merely a satellite or poodle of the US.

The alliance of the two powers is incontestable but he argues persuasively that the City’s activities are driven more by the interests of British capitalism than by subservience to Washington.

In developing both these points, Norfield is actually challenging assumptions about world capitalism that trace their lineage back to Kautsky and the first debates about imperialism in the workers’ movement before WWI.

Some territory is never conclusively won, it seems.

Norfield’s own analysis of imperialism seems to orbit around Lenin’s, rather than fully embracing it. There is nothing necessarily wrong with that, since the formulations of 1916 clearly no longer fully fit 2016. His definition — “the present stage of capitalist development where a few major corporations from a small number of countries dominate the world market” — is only a partial truth and does not get us much further along.

The later assertion that “the term ‘imperialist’ can apply to companies as well as states,” in my view, further confuses the relationship of private profit to state violence.

He produces a world hierarchy of power based around five criteria — the size of a country’s economy, its ownership of foreign assets, the global role of its banking sector, the status of its currency in international markets and its level of military spending. This tends towards the arbitrary — one could as easily choose arms sales, or corporations in the Fortune 500 as measures — without being wrong.

By giving the five chosen factors equal weighting, a league table of world power is produced. The US is obviously in front by a very considerable way, with Britain in second place, followed by China, Japan, Germany and France.

The top 20 is rounded off by Ireland, which rather begs the question as to where imperialism starts and stops.

However, this does not detract over-much from the great merits of the book in explaining the financial underpinning of world imperialism and Britain’s particular role in it.

It is absolutely right to remind us that Britain remains a front-rank economic power and that this depends in very large part on London’s place at the centre of the mechanisms of international capitalist exploitation, a role which has survived the end of Britain’s formal empire and been born anew in the time of capitalist globalisation. British capital’s relationship to Islamic finance and to rising China are both addressed.

Norfield outlines how imperial power allows one state to appropriate surplus-value created elsewhere and how this is profitably recycled in the dealing rooms which once employed him. He develops his analysis into an assessment of the 2008 crisis and, again correctly, traces this back to the inner propulsion of capitalism, in particular the famous tendency for the rate of profit to fall, rather than attributing it all to the excesses of speculation.

“British imperialism,” he writes in conclusion, “has created a financial machine that functions as a vampire’s blood bank for the surplus value produced worldwide, from every country and in every currency.”

Of course, this does not amount to a comprehensive assessment of all the many facets of imperialism. Lenin wrote a century ago ago that such a project would be effectively impossible for such an all-embracing and protean phenomenon and matters have got no simpler since.

One urgent need is to connect the luminous financial analysis of Norfield’s book to the actual exercise of military force by imperialism. Millions of people understand the invasion of Iraq, for example, to be “imperialist” but do not so regard the workings of City financiers.

The reason is that the latter are masked, as is capitalist exploitation itself, by the illusion that they are fundamentally non-coercive, while occupying another state by force is clearly not. Outlining the connections that lead from bank to bombardment can dilute this illusion, to the great benefit of the labour and anti-imperialist movements.

That in turn can deliver on the wish expressed in the last sentence of this outstanding book that “only a stake in the heart of the capitalist system, not simply in some of its financial forms, will be enough to see an end to the power of imperialism.”